Trump Wants Germany to Pay Its Fair Share for Drugs — And You Should Too
Last week, Trump administration officials met with the German government to discuss Germany paying more for prescription drugs innovated and manufactured in America.
It’s about time.
Donald Trump has always hated that U.S. pharmaceutical companies charge Americans more than the big publicly funded healthcare systems in Europe.
He has called it freeloading. He has pointed out that American taxpayers bear some of the costs of these drugs through research grants and paying to educate the researchers. It galls him further that the left says Europeans “enjoy” public healthcare in large part because they pay so much less for drugs that we developed.
He feels the same way about defense, which is why he has forced European countries to meet their NATO obligations and pay more to defend themselves. He has been frank in questioning why those who have not supported the war in Iran are still deserving of the protection the U.S. has provided to Europe since World War II. (RELATED: Trump’s NATO Dilemma)
He has cut back on U.N. spending, changed the terms of trade deals, dramatically reduced government regulations, and even started a prescription drug service — TrumpRx — to address what he sees as raw deals for U.S. taxpayers. (RELATED: The View’s Joy Behar Is Furious TrumpRX Is Lowering Drug Costs)
Germany has been on the receiving end of much of Trump’s criticism. Europe’s most prosperous country has slow-walked Trump’s calls for increasing defense spending to meet its NATO obligations. They’ve resisted his advice not to rely on renewable sources and the Russians for their energy. And they’re pretending not to hear his call to share more of the costs of the American-made drugs on which the German people rely.
Now, the Trump administration is turning up the pressure on the Germans to act. In addition to the talks this week, Jamieson Greer, the U.S. trade representative, and Chris Klomp, Trump’s top health department adviser, recently met with the German ambassador to the U.S., Jens Hanefeld, to urge the Germans to pay more for medications so Americans can pay less.
The Trump team told the Germans that the U.S. could reimpose tariffs on Germany to combat unfair trade practices, and that a failure to address the imbalance could be seen as an unfair trade practice.
The Germans left the meeting agreeing to review the matter, but the Trump administration should not let this go. A similar strategy was already employed to get the U.K. to pay more for drugs purchased by its National Health Service.
It won’t be smooth sailing.
The Germans already were in cost-cutting mode with regard to healthcare, working on a plan to cut tens of billions of euros from their budget. American-made pharmaceuticals were seen as a potential source of savings. The idea of paying more to the Americans, with whom they’ve squabbled over Iran, energy, and other matters, won’t be an easy sell.
But the Trump administration is preaching fairness. The Germans purchase these drugs at a substantial unearned discount, which is forcing Americans to go without the medicines they need because they can’t afford them.
American firms spend more than $100 billion per year on pharmaceutical research. It costs, on average, $2.7 billion to bring a drug to market, and 90 percent of those drugs never make it to patients.
In other words, developing a new medicine is an expensive and risky endeavor. Yet even though it’s American corporations that regularly take those risks, European countries pay 20 to 30 percent less for the drugs these companies innovate than Americans do.
Meanwhile, 22 percent of American seniors say they skip drug doses to save money. These are the injustices that President Trump is seeking to address by serving notice to the Germans. (RELATED: Why Americans Pay More for Healthcare and Still Can’t Afford It)
The gravy train set up to get Europe back on its feet after World War II has run its course. Any future concessions made by the U.S. will have to be matched by concessions from the Europeans.
It annoys the Europeans when Trump raises these issues, but he is just looking out for the American people. The Germans know the facts are not in dispute. Now, Trump is bringing the pressure necessary to get the change America needs.
READ MORE:
Why Americans Pay More for Healthcare and Still Can’t Afford It
The Race to Fix America’s Healthcare System
Brian McNicoll, a conservative columnist, is a former senior writer for the Heritage Foundation.